With the final outcome in Greece being that they have given up ALL SOVEREIGNTY, all their most valuable assets, people’s homes, their pensions, and soon their savings accounts. Their Prime Minister Alexis Tsipras seems to have been hoodwinked by his own media, which resulted in all this.
The first lesson one learns with negotiations, is that each side has to be willing to walk away from the negotiating table, otherwise, there is no negotiating.
From the start, Tsipras and Varoufakis (his finance minister) said that Greece will “never leave the Euro.” That was their ONLY bargaining chip. Once they said that, the Troika knew at that point that the Troika had won. And immediately they told Tsipras to fire Varoufakis (which he did), and not only will you not be able to bargain with us (who cares about the 61% of Greeks that voted the week previously for less harsh measures), here are even harsher measures that you will adopt. Period.
I believe that Tsipras was tricked by his own media, TV stations, newspapers, blogs, that are owned by Greek Oligarchs who are snapping up all the Greek assets they can get their hands on with the help of the Troika. From the beginning the media kept saying that 81% of the Greeks want to stay in the Euro. When in fact, the 61% vote against more austerity might actually indicate that that number is incorrect.
More legitimate polls from non-Greek entities indicated that this number was incorrect, and in fact, the opposite was true, more Greeks wanted out.
— Katerina Moutsatsou (@katmouts) February 28, 2015
If this is the case then the Greek media played their hand well, and tied Tsipras’ hands by tricking him into taking what the Troika sent his way, since he had NO bargaining chip whatsoever.
It’s a theory, but given the fact that the Greek media, from the start, has been acting as the mouthpiece of the Troika, it’s possible that this theory is not far from the truth.
Greece is supposed to sign a three years Memorandum of Understanding:
The Greek Parliament must immediately adopt the new DESTRUCTIVE austerity measures: The reversal of a recent program to help people who can’t afford to pay their taxes for taxes and social security contributions for thousands of households that fell behind with payments over the last few years (meaning Greeks will start losing their homes, that may have been in the family for 100s of years.
The Greek government must fire a few thousand public employees.
On privatizations, a trust fund will be created for the transfer of PUBLIC assets up to the value of 50bn euros. Half of this capital will be used to fund the recapitalization of Greek banks, which will also be fully privatized.
The electricity network, roads, the railway, airports, and ports – all to be taken away from the people. Hikes in VAT charges that undermine the purchasing power of households and the competitiveness of key economic sectors. Therefore, the increase of VAT charges on basic food (from 13 to 23%) and hotels (from 6,5% to13%), which will be a multiple higher than those charged in neighbouring countries.
All pension funds will be merged, ensuring a race to the bottom for all pension schemes. The end of a subsidy for the lowest pensions in the system. This will affect about 300,000 pensioners who will see their pension slashed by 30-40%.
There are also a number of other structural reforms: opening shops on Sundays, the opening of non-prescription drugs retail market, the opening of the dairy market by redefining what is “fresh” and what is not. (Meaning they will be forced to buy their milk from Germany, be redefining that the word “fresh” can mean weeks old milk.)
When these key items of legislation have passed through the Greek parliament, Greece will get short-term bridge financing to avoid bankruptcy. The amount is estimated to be €7bn by next Monday and another €5bn by mid-August. Soon afterwards, ESM will release €10bn will be used immediately to recapitalize Greek banks, setting side €25bn for this purpose.
Supposedly, Greece has secured a development package of 35 bn in investment capital. This is not quite the whole story. This is not “fresh capital” but a series of funds already in place to be “mobilized” and “leveraged” to counterbalance the austerity measures.
Greece did NOT get any concessions from the EU side.